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Brazil Roiled by General Strike Over Government Reform Plan

(Bloomberg) -- Millions of Brazilians were stranded without public transport and faced shuttered banks and schools on Friday as labor unions staged a nationwide strike against President Michel Temer’s reform agenda.

Small groups of protesters clashed with police in some of the major cities as buses, commuter trains and metro lines ground to a halt. Access roads to airports in Rio de Janeiro, Sao Paulo and Brasilia were temporarily blocked by barricades and fires. But, barring some delays and cancellations, flights around the country continued to operate.

Protesters block access to Cumbica de Guarulhos airport.

Photographer: Sebastiao Moreira/EPA

The general strike comes at a delicate moment for the Temer administration. Its commitment to tackle Brazil’s rising budget deficit has drawn praise from investors and helped fuel a currency and stock market rally over the past year. Yet patience with austerity is wearing thin as there are few signs of growth and unemployment jumped to a record high of 13.7 percent, according to data released on Friday. While a general strike is a relatively unusual event in Brazil, it appears unlikely to weaken the congressional support base that Temer needs to secure approval for his labor and pension reforms.

Friday’s disruption could put pressure on the government to offer further concessions but it is unlikely to derail the reforms, according to Thomaz Favaro, an associate director at Control Risks. "This is a sizeable show of strength by organized labor," he said. "It may potentially have an impact on the calendar of the approval process."

Forca Sindical, one of the unions organizing the walk-out, said that around 40 million Brazilians did not turn up for work on Friday. But Justice Minister Osmar Serraglio called the demonstrations "negligible" and said that Brazilians understood the need for reform.

The real was little changed against the U.S. dollar in early afternoon trading while the Sao Paulo stock exchange gained more than 1 percent. State-controlled oil giant Petroleo Brasileiro SA, or Petrobras, said the strike had no meaningful impact on output.

On Wednesday, the lower house of Congress approved a bill to loosen Brazil’s decades-old labor regulations. The bill now heads to the Senate. Next week, a special congressional commission is due to begin voting on a constitutional amendment that would overhaul the pension system. A survey published last month found that 72 percent of Brazilians opposed the pension reform.

In expectation of widespread support for the strike, Sao Paulo and other Brazilian cities have made contingency plans to ensure public servants can make it to work. Yet protesters blocking roads made it difficult for many commuters to get to work. In some cities police used tear gas to clear the way.

Globo TV showed images of a fist fight that broke out between unionists and workers who decided to break the picket line at Rio de Janeiro’s Santos Dumont airport.

In the nation’s capital Brasilia, the number of security officials protecting government buildings outnumbered protesters who mixed with cyclists enjoying a sunny, traffic-free day downtown.